[opendtv] Re: Analysis: The Real Winner in the TV Wars
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Tue, 7 Dec 2004 08:44:37 -0500
At 10:11 AM -0500 12/6/04, Manfredi, Albert E wrote:
>Craig Birkmaier wrote:
>
>> Why are the media conglomerates vertically integrating
>> around content? Perhaps this line from the following
>> story provides a clue...
>>
>> > Why are rates rising in an era when inflation is so
>> > low? The cable and satellite industries are paying
>> > dearly for programming, which accounts for about 50%
>> > of their operating budgets.
>
>This is silly. The simple answer is, "Rates are rising
>because the cable and DBS companies can increase their
>rates and people still pay." If people are willing to
>pay, and the sale is not illegal, there's nothing to
>stop the seller from increasing his price. And the price
>by definition reflects the value placed on the product.
>Duh.
>
>> Consumers are the big losers, as they are forced to
>> pay more and more for advertiser supported content.
>
>Consumers are only the losers if they're coerced to pay.
>They are not. There's no gun to anyone's head. This is
>just entertainment, for heaven's sake.
>
I am not coerced to drive either...it is simply a necessity like
electricity, water, telephone and cable (or DBS).
I do not have much control over the cost of my car insurance (other
than keeping my record clean). I do not have ANY control over the
cost of gas, other than driving around looking for the cheapest
price. And I do not have any control over the escalating cost of
vehicles due to government mandates on "stuff" that must be included
in every vehicle.
The only valid thing in your post is the reality that the pricing for
multichannel TV is not so high as to cause people to reject the value
proposition. Or another way of saying this is that even at these
ridiculous prices, cable and DBS are still a better value than OTA
the OTA TV proposition.
We could all eat hot dogs and hamburgers every night instead of
steak and grilled seafood. But many people are willing to spend a bit
more for a higher quality product.
None of this changes the fact that the media conglomerates continue
to push the cost of their content every higher, because they have so
much leverage over the content distributors. This leverage is
provided in part through their content oligopoly, and in part because
of government regulations that allow the media conglomerates to hold
broadcast content hostage in order to push up the price on other
networks.
All of this is NOT unusual when the government steps in to regulate
what should be an open marketplace. I now routinely see add on fees
on many bills with "regulatory recovery fees."
Regards
Craig
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